Post Session: Quick Review

Local equity markets staged a rally for yet another session in the holiday-truncated week on sustained buying activities by funds and retail investors on hopes of further reforms after government promised to open up the coal industry to private players. Additionally, sentiments were also buttressed after India's decision to remove price controls on diesel and to raise natural gas prices, which signaled fiscal discipline was termed a 'credit positive' step by Moody’s, which also noted that fiscal savings for the government's diesel measures were likely to be limited given total subsidies account for less than 1% of the country's 2013/14 gross domestic product. Thus, by close of trade, both Sensex and Nifty, accumulating gains of over half a percent, concluded past crucial 26,550 and 7,900 levels respectively. Meanwhile, broader indices also participating into the rally went home with gains in the range of 0.20%-0.90%.

On the global front, Asia-pacific shares concluded mostly into negative terrain as modest relief witnessed on account of better than expected China’s GDP data failed to assuage lingering concerns of weakening momentum in the world’s largest economy. Official data showed that China's gross domestic product rose 7.3% from a year earlier in the third quarter, down from 7.5% growth in the second quarter of this year, while China's industrial output growth in September accelerated and rebounded from a near-six-year low in August, driven by the government's recent targeted easing measures. Meanwhile, European shares inched up in choppy trade on Tuesday, trimming the previous session's losses as better-than-expected quarterly sales from Apple helped soothe worries over corporate results.

Closer home, while most of the sectoral indices on BSE concluded into positive territory, stocks from Oil & Gas and Healthcare counters were the only losers. On the flip side, stocks from Realty, Power and Infrastructure counters were the only gainers on BSE. Shares of power companies rose after the government unveiled that it would be auctioning 74 coal-mining licenses to private companies in the next three to four months after the Supreme Court last month canceled 214 coal licenses issued to private and public companies since 1993.

Additionally, bank stocks rose for the second day in a row as a sharp cut in diesel price, which is expected to bring down freight rates and in turn reduce consumer price inflation, bolstered hopes of rate cut by Reserve Bank of India (RBI). The gains of banking counter came on account of in line with expected results of country’s second largest private sector lender HDFC Bank. The bank’s net profit rose by 20.1% to Rs 2,380 crore compared to Rs 1,982 crore in same quarter last year supported by higher other income and net interest income by impacted by higher provisions

Besides, telecom stocks rang loud in trade after country’s No. 3 mobile operator, Idea Cellular, posted a 69% rise in quarterly profit after adding subscribers faster than its competitors and as its data plans attracted more users. Also Telecom operators’ stocks hogged a lot of limelight in trade after an inter-ministerial panel telecom commission, formed to work on modalities of spectrum auction decided to conclude proposed telecom spectrum auction by February 28, 2015 and asked Telecom Commission to work out a mechanism for allocating airwaves to successful bidders in a reasonable period, preferably within 90 days after receipt of payments from the bidders. The market breadth on the BSE remained in the favour of advances; where advancing and declining stocks were in a ratio of 1475:1335, while 112 scrips remained unchanged. (Provisional)

The BSE Sensex ended higher at 26573.59, up by 143.74 points or 0.54% after trading in a range of 26407.00 and 26615.41. There were 22 stocks advancing against 8 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.93%, while Small cap index up by 0.23%. (Provisional)

The gaining sectoral indices on the BSE were Power up by 2.55%, Realty up by 2.45%, Infrastructure up by 2.38%, Metal up by 1.63% and Capital Goods up by 1.55%, while Oil & Gas down by 0.80% and Healthcare down by 0.80% were the only losing indices on BSE. (Provisional)

The top gainers on the Sensex were GAIL India up by 4.75%, BHEL up by 4.39%, Sesa Sterlite up by 4.14%, Wipro up by 3.12% and ICICI Bank up by 2.74%. On the flip side, Mahindra & Mahindra down by 2.69%, ONGC down by 2.58%, Coal India down by 1.62%, Infosys down by 0.98% and Sun Pharma down by 0.88% were the top losers. (Provisional)

Meanwhile, just few days after gas price hike, Finance Minister, Arun jaitley underscored that a price of $5.61 per MmBtu would ensure that explorers make gain, but not windfall profits. He asserted that rate hike, approved the Cabinet Committee on Economic Affairs (CCEA), balances interests of oil and gas explorers and consumers as this while fetching some profits to explorers would also be minimizing the burden of consumers.

Modifying the Rangarajan formula on gas pricing, the centre hiked the natural gas price to $5.61 per mmBtu from the existing $4.2/mmBtu rate, which was way lower than the demanded price hike of $8.4/ MmBtu, approved by the previous UPA government.

Justifying government’s stand on this issue, Jaitley added that he was not against business and did not consider words like ‘profits’ as wrongful, however emphasized that he did not favour ‘windfall profits’. Further, he unveiled that gas price decision was taken professionally as a committee of secretaries discounting irrelevant factors in the Rangarajan formula, approved by the previous UPA government, took into consideration only the relevant ones.  Lastly, he added that gas price has been revised biannually and rather has a realistic approach.

India VIX, a gauge for markets short term expectation of volatility dropped 6.06% at 14.19 from its previous close of 14.19 on Monday. (Provisional)

The CNX Nifty ended higher at 7928.50, up by 49.10 points or 0.62% after trading in a range of 7874.35 and 7936.60. There were 38 stocks advancing against 12 stocks declining on the index. (Provisional)

The top gainers on Nifty were Jindal Steel & Power up by 7.34%, DLF up by 4.91%, BHEL up by 4.80%, GAIL India up by 4.78% and Sesa Sterlite up by 4.19%. On the flip side, PNB down by 2.89%, ONGC down by 2.60%, Mahindra & Mahindra down by 2.53%, Ultratech Cement down by 2.05% and Coal India down by 1.73% were the top losers. (Provisional)

European Markets were trading in red; UK’s FTSE 100 was down 0.71%, France’s CAC was down by 1.51% and Germany’s DAX was down by 1.27%.

Asian markets ended mostly in red on Tuesday, as China growth tempers stimulus bets. China grew at its slowest pace since the global financial crisis in the September quarter and risk missing its official target for the first time in 15 years, adding to concerns the world’s second-largest economy is becoming a drag on global growth. Premier Li Keqiang has stated repeatedly that authorities will tolerate growth slightly below target as they try to reshape the economy so it is driven more by domestic consumption and less by exports and investment. China’s gross domestic product fell less-than-expected last month. Chinese GDP fell to an annual rate of 7.3%, from 7.5% in the preceding month. Chinese Retail Sales fell to an annual rate of 11.6%, from 11.9% in the preceding month while Chinese Fixed Asset Investment fell to a seasonally adjusted 16.1%, from 16.5% in the preceding month. Chinese Industrial Production rose to 8.0%, from 6.9% in the preceding month. Japan’s All Industries Activity Index fell to a seasonally adjusted -0.1%.